Report: Apple No Longer Wants Samsung Components In The iPhone

I have always found the business relationship between Samsung and Apple an odd one. On the one hand, they are both battling it out in court over patents, and both just so happen to produce the 2 most popular smartphones in the world. On the other side, Apple is a huge customer for Samsung, as multiple components in the iPhone are manufactured by Samsung. But after the huge victory that Apple had in court against Samsung last week, Apple is apparently trying to cut Samsung and their components out of the iPhone all together, as Reuters and Bloomberg are reporting that Apple will no longer use Samsung’s memory chips and displays in the iPhone.

Apple is responsible for around 9% of Samsung’s overall revenue, and is currently Samsung's biggest customer. But due to the recent finger pointing and patent suits, Apple now plans on using Sharp (and Japan Display KK) to supply the new screens in the iPhone, LG and AUO for supplying displays for the rumored iPad mini, along withToshiba, Elpida Memory, and Sk Hynix for storage and memory chips

Apple will still (for now) rely on Samsung for processors, but are also reportedly in the process of scaling back orders for chipsets as well (via Slashgear):

“Samsung is still on the list of initial memory chip suppliers [for new iPhones]” a source said of the Korean company’s sidelining. “But Apple orders have been trending down and Samsung is making up for the reduced order from others, notably Samsung’s handset business.”

I find it hard to believe that Samsung will simply shrug off losing their biggest customer, but according to reports, Samsung is “making up for the reduced order from others, notably Samsung’s handset business”.

I guess if Samsung really wanted too, they could tell Apple that they can no longer use Samsung processors in the iPhone, which could cause huge problems for Apple in the short term. Whatever happens, it’s becoming very clear that Apple's and Samsung’s business relationship is quickly deteriorating.

I think the best thing Samsung can do is make a top of the line cpu, put it in their own phones and then NOT sell it to anyone else.They will never have an edge over the competition as long as they're competing against themselves.How can they beat their own hardware?

Haha Apple, please come out with a sucky iPhone. I promised my GF i'd switch if iPhone 5 is better than any 2 android phones I named in June. I went with the GNote 2 and the Nexus. The bets I make. LOL.

Although I was surprised she came home with a Galaxy Ace last week for her secondary phone line. "Just to see what the Android fuss is about". Unfortunately, she bought a korea only model. Good thing I noticed as I was plugging it in to flash it on odin- DL Mode was in Korean - so I aborted.

Although I honestly do not see any single sammy product beat the iphone on sales volume. Too many variants (both android and Samsung) for that to happen. GS 3, GNote 2, One X, V, S, Moto Razr, xperia, Nokia Lumia 920 and Galaxy Ace owners will just have to content themselves that they have a better phone than the iPhone 5 while the Apple owners revel on new sales and revenue records set (as if it is something they benefit from)

Good call on Apple's part, however, this has a bit of a drawback. At least, this is being done in their own terms rather than Samsung rescinding their contract and suddenly leaving them in a lurch. Samsung may feel the effects of this in the near future, but being one of the best at what they do, they'll be fine in the long run.

However, the wisdom of going to a new supplier at a very critical time is questionable. I am sure the image retention snafu on LG Macbook retina displays is still fresh on the minds of consumers, well maybe those who got LGs displays and not Sammys. It might not bode well that for the first time, the iPhone has a very serious challenger in the GS3. I wonder how the loyal apple consumers feel if and when the vaunted iPhone 5 is plagued by hardware issues?

Until now Apple has single sourced all of their chips from Samsung. The CPU, memory (DRAM &NAND) as well as screens are all Apple designed and manufactured by Samsung.

Apple is now diversiving their supply chain by adding other suppliers. This is a smart business move for any company to make. It does not mean that Apple is dropping Samsung completely, just that they are shifting a portion of their demamd to others as well. Single source supplies are never a wise idea and Apple has finally realized that. I'm actually surprised that it did not happen sooner.